>> it is on tape. >> a promise is a promise. now you're talking. we'll meet in teterboro. >> it's on tape. i'm going to take that, barry. >> come on. we have a nice studio. it is not a barry-designed place but -- >> don't put down good architecture. it is not becoming. >> thank you. for everybody else, make sure you join us tomorrow. "squawk on the street" is next. ♪ good tuesday morning. welcome to "squawk on the street." the business program that never uses replacement reps. i'm here live at the new york stock exchange. the latest stiller price index has been released and we are showing you the results at the bottom of the screen. david blitzer will join us in a couple minutes from now. meantime, futures on this day, we are dealing with various corporate news, which we'll get to.

including warnings from very large global companies. meantime in europe, the situation continues to focus largely on spain and the esm. right there you take a look at the ftse up 12 points. the road map begins with caterpillar lowering guidance saying it sees anemic growth in 2015. what's behind the warning and what about the two years between now and then? >> well, google launching a new maps app, will it happen? it gets more heated and more complex. >> barry diller on "squawk" said social media stocks are all overvalued but he said he would buy shares of facebook and that the ipo decline is not a national tragedy. >> and payday for michael kors who stands to make $200 million. he remains long in the shares of this long-flying ipo. caterpillar is cutting the

earnings forecast and seeing a bigger drop in demand for earth moving equipment because of weaker commodity prices. they say economic growth is slowing more than the company had expected, but jim, it is for 2015. this morning you're looking at analysts viewing this in different ways. >> right. i think there's a lot of people, carl, who were saying, of course, hey, it is obviously the world is slowing. a lot of people say, look, what they're really doing is saying even in this environment we're going to make far more money than we have in the previous downturns if we get it at $6 in earnings, which is well below what they think they can earn. we'll still pay the dividend. i come back and say the acquisition, which they made and a lot of people were critical of, is working. that the synergies are working. that the costs taken out in regards to manufacturing, look, the world is slowing but it is not a disaster. that's why caterpillar is not at 885.

>> do you lump this with the warnings from intel and fedex. it is a global company looking at a slowing global company. >> there isn't anything specifically i saw in the cat release that was saying we are not getting it right. this caterpillar is ready for a downturn unlike any other caterpillar we have had. a lot of times caterpillar had terrific numbers in the presentation about how low earnings have been in the slowdown. the headlines for this story, i'm sure he's at home saying, that's not what i said. i did not say things were bad. what i said is we will do well if things get bad, but at the same time there was a cut. he has to live with the consequences of saying things are not as hot as last time i spoke. >> is it mind-blowing that he has enough clarity to take down guidance for 2015? >> yes, given the fact that reasonable people saw something that happened in the last second of the game last night still couldn't predict what was going

to happen. what's the story in 2019? what does the crystal ball say about 2037, because that's the year -- no, whenever you lay out five-year plans, you fall prey to the idea to update the five-year plan. honeywell has a five-year plan and every time david kody speaks he sticks by the five-year plan. it is not like stalin where you say, we didn't meet the targets and i'm going to execute. it doesn't have that cause and effect. >> there's no siberia in this case. >> why do companies even feel obligated to offer a five-year plan publicly? if you have a five-year plan internally, why do you need to commute communicate that publicly? >> i want to say i want to show you we are not cyclical. if merck has a five-year plan,

it may not make sense. i am watching honeywell and they are sticking by it. >> we talked yesterday about why some executives are fearful of making a big purchase. maybe that's one reason, you buy something big going into a slowdown you're going to get hit for it. >> and penalized for it for quite some time. and the shareholders are not typically going to applaud you for a long period of time for taking a big risk. hence you'll get it on the other end if you take that kind of a risk. this was not a game changer for caterpillar or a large important acquisition. not a company changing acquisition or transforming. but it is funny you mention that, carl. a deal was in the works. let's call it $5 billion that fell apart today. i don't know what the companies are, by the way. sort of get these hints occasionally because company a didn't feel synergies were there with company b. therefore they chose not to move ahead. that is typical of what's going on these days. >> remember, in this report they

are very specifically saying here, when we announced the acquisition we said the benefits were 400 million by 2015. they are already getting there. now joint global talked on "mad money" that it's the after market part that is you need. in the end, when you buy at the top, you're very defensive. this is not aol/time warner. at the same time, had they waited a couple, 18 months, they would have gotten a very different dynamic. >> very different deal. it would have been time warner buying aol. by the way, greatest deal ever done for the shareholders. >> sometimes you have winners and losers. >> that's right. there always are. >> the entire sector is down across the board. you look at deere and cat. jpmorgan estimates that companies will be down 14%

through 2014. now is a great time apparently to buy up the mining services companies, according to ge, which will start a new mining unit. >> ge -- look, they have a good sense of the world. i'm not going to say -- look, put it this way, if they bought joint global they would do better than caterpillar, so maybe what they're saying is, okay, look, we didn't buy the top. we are not going to get the bottom. maybe china turns. i thought the general electric idea of buying my equipment and initially thought it was wrongly timed. stephanie link is on "fast money" and she runs some travel trust pushing right back to say, hey, listen, when is a good time if now isn't a good time? you have everybody downgrading the mining forecast, don't you buy -- why do you want to buy high? why can't you buy low? >> too often we see buying high because that's when confidence is high, that's when the stock market is high, but you're

right. >> the other day you're doing the thing and i'm saying, evaluations aren't that bad. why aren't they doing it? ge comes out and says we are a bunch of jokers. no, caterpillar paid too much. ge did not pay too much. >> that's true given the fact ml talked down the scale of big-scale acquisitions for most of this year. we are watching google shares on track to open at new all-time highs. this one day after the internet giant posted a record high close of 749.38. meantime, eric schmidt says no decisions have been made about the new version of the google maps app to replace google's mapping location with the rollout much to the chagrin of consumer who is say thiing the google version is better. here with google, jim, this has been a monster run for this

stock. still a very low evaluation. you have to wonder if there's a tradeoff being made. this stock had been the atm for buying facebook shares. facebook shares obviously under significant pressure still. sol has that turned around? >> it's a remarkable run from the bottom. obviously they were up in the 700s, went down to the 200s and now they are back. it is equal to the s&p, but what i find interesting is that the stock has gone up a lot in 2012. mid-teens in 2012 so you can make a case it's still a lagger. does it have china? it does not have china, which is being such a -- this going from -- >> it does have mobile. and it has it big. and if there's any company with moubl working on the end, it's google. not facebook. it's google. and it also has evaluation that is historically very low, right? >> it makes a ton of money. >> what i continue to hear from guys when i talk to them is if you want the advertising exposure, why wouldn't you buy

google 12 times or along those lines. >> what's funny about maps, people think it is hilarious that you're getting wrong directions, but longer term, whose map app you use determines whose advertising you're going to see. we don't even understand the degree to which your location is going to feed revenue for various companies over the next ten years. >> i would like the map application that tells me to make a left or a right. but you have to get to the blue dot. the blue dot, those of you who use the google map on apple, it will show you exactly where you are. and i have found it to be a lifesaver repeatedly. this is something i don't want taken away from me. and obviously this is not something that is -- or else you wouldn't be continuing to read this and continue to see google go up. mahaney said that the patents are good and the costs are behind them.

i thought that was significant. >> he wrote a very long piece just as a reiteration of his buy that surprised me. mark mahaney is who we are talking about. and they talked about motorola coming up. let's not forget they own a handset carrier that paid $1400 for it, but they are going to make some phones. >> interesting sub text. google is a machine. it is spaceless people doing a good job. apple had a virtuoso. he is now away. he's a symphony live at google versus a late virtuoso. this is a theme we keep hearing. would steve jobs have taken out a superior product and put in an inferior product? >> sounds like you're turning a bit on the google/apple front. >> apple is an investment. if you said to me right now, which would you buy? i think that google has a lot more things going for it than i

thought have thought. i think that the map really crystallized things reminding people to think, google is a good company. >> meantime, barry diller speaking out on social company this is morning on "squawk box." we asked the media mogul about their evaluations. >> when you look at a groupon or some of the other stocks -- >> they are all overvalued. >> all overvalued? >> sure they are. >> would you own stock in any of these companies, including facebook, by the way? >> first of all i don't own stocks other than the ones i'm engaged in. so, yeah, if i were a stock-owning person of companies, yeah, sure, i would absolutely buy facebook now. >> intended to give mark zuckerberg a break saying, look, if you're going to sell stock, do it when your shares are high. in this case, happen to be with the ipo came out. >> how could he say he would buy facebook when she's saying

everything else is overvalued at the same time. facebook is not much cheaper than anybody else's. >> comparing facebook to groupon is so much larger. it has such a larger footprint in every way. it is still a giant in what it does. i think barry thinks along those lines and i have plenty of locations with him in the past. whereas the others are small players. >> well, the article that says it is basically way overvalued and the lockups coming up. at the same time, if i ask facebook. i say how is facebook going. better more possibly that it has been. the apple app is good. last week marked the off sales of work.com. august was a great month for facebook.

i think they had a major churn and zuckerberg out there was not idol. at the same time millions of shares are coming to market. it is possible facebook could be better than the company, but you have to wait for the expiration. >> you sound like it is intensified but now all the shares are coming to the market because they expired. enterprise product, a great company, post it in the hole. >> that's a jean. >> the fundamentals may have shifted. it is entirely possible to g get -- facebook is terrific. salesforce.com saying the facebook platform is end grated and a lot of moguls are working. it is not a static company. these people are not oblivious

and zuckerberg is a great guy. whether you need media or a partner, be careful saying facebook cannot get it together. you no longer think that. that's because they have a better outlook. >> you mentioned you would be tempted by the corp secondary. >> i think that high-end retail is a great place. look, the room is littered with stock that has been sold by very much people that you feel like you don't want to take the other side of the trade. i still like the company that to me has got momentum. kors, they priced it in the hole. it's a good investment that continually has great numbers. do i think this is the best. >> a busy morning shaping up here chchlt cities are the big

winners and losers in the home price report? we'll talk about which category your town falls in. and we'll look at futures as we kickoff this tuesday morning. moderate strength here as we continue on "squawk on the street." . don't go away. on the road. so, what do you think? [ engine revs ] i'll take it. [ male announcer ] it's chevy truck month. now during chevy truck month, get 0% apr financing for 60 months or trade up to get the 2012 chevy silverado all-star edition with a total value of $8,000. hurry in before they're all gone! and those well grounded. for what's around this corner... and the next. there's cash flow options from pnc. solutions to help businesses like yours accelerate receivables, manage payments,

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welcome back. shares of carnival are higher after beating the bottom lines. up 2.3%. fuel costs were contained for

the quarter, which is a good piece of news out of ccl. >> not long ago, obviously -- >> given how evaluation has not moved a lot, conditions in the industry have gotten better. >> let's get back to the key housing data out this morning. the latest s&p report showing home prices rose again in july this time of 2012. the third consecutive month all 20 cities and both composites reported positive monthly changes. here for the first time is david blitzer chairman of the s&p 500 index. we have seen a lot of signs that indicates housing may not be stabilizing but perhaps moving up. would you agree with that assessment? >> overall the housing industry has come back. looking at our numbers on prices as you mentioned, another solid month. looking at numbers on starts, existing home sales, new home sales come in tomorrow. and in general housing is back. and some comments about home

builders also suggest housing is very much back in place. >> what does back mean, though? define that for me. >> what it means is about three years too late we may finally get a little boost to the economy from the housing sector, which we have obviously been missing throughout the post-recession period or the recovery period, however you want to call it. it's not going to go straight up but we've got 20 cities up month to month. we've got i think 15 cities up year over year. and it looks like we will continue to see some rise in home prices. we are also hearing spot reports of a shortage of inventory. >> david, jim kramer. when i look at your numbers i'm trying to figure out, is month to month the precursor to tell me next year this is where i should be buying if i'm thinking about buying a home? >> well, i think you have to certainly look at the year-over-year numbers. the figures we have are not seasonally adjusted in the headline. and we are moving into a

seasonably slow period coming up. so we will probably see home prices, so smaller gains and an occasional decline in one city or another over the next few months. that's purely the seasonal factor, but the trend, i think, that is turned and is shown by the fact that 15 of the 20 are up year over year. and that says to me the housing has really come back and it will provide some stimulus for the economy. >> david, still a lot of concern over lending standards in this country, if you're trying to get a mortgage, it is not easy. critics of the white house say they have not done enough for those under water do. you think the easy fruit, the low-hanging fruit has been picked? >> i don't know if the low-hanging fruit, but you're right about the lending standards. banks, banks learned the hard way not to give mortgages to everyone in sight. now they have gone too far in the other extreme. but it is really the bank's choice more than anybody else's.

people who have under water mortgages, there are a lot of them out there. it is not clear how many or where they are. the shortage of housing is probably not just a few hundred under water mortgages, it is probably people who finally see prices turn. they are not quite ready to put their home on the market because they believe it's going to keep going up. >> david, talking about prices turning, we also focus on atlanta because it has been so terrible, but even that improved, didn't it? >> atlanta finally got a year-over-year number not down 10% or more. they still seem to have a big backlog of foreclosures, not only atlanta but probably the whole state of georgia. but they are finally working that off. and they are probably seeing a few more pockets around the nation, but i don't think they are that many. the ones that exist are all in judicial state where is foreclosures actually go through the court system and they grind along very slowly. >> all right. dave blitser, s&p, thank you

very much. appreciate it. >> thank you. well, if you're looking to be part of the $700 club, last night you stood behind apple as a long-term investment but called google a better stock to own right now. what surprises does he have in store for today? take a look at the futures, we are looking at a higher open this morning. we'll see how we do when the bell rings here on "squawk on the street." stay tuned. smart comes with 8 airbags, a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety. there's natural gas under my town. it's a game changer. ♪ it means cleaner, cheaper american-made energy. but we've got to be careful how we get it. design the wells to be safe. thousands of jobs. use the most advanced technology to protect our water. billions in the economy. at chevron, if we can't do it right, we won't do it at all.

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clutch down when he sees one, jim kramer is here. this is not the way he wants to be written about today. >> this is not the golden tape or cross or anything having to do with that, but it is a tremendous shortfall. tremendous revenue outlook cut. there are a lot of people who feel this company is frankly toast. now, that has been a hedge fund call. ly tell you this, i was just shocked at the revenue decline. and i've never been a believer in this company, but i have to tell you, this is a jarring, jarring reforecast. and if you own it, i don't know what you're thesis is anymore. >> he's going to double down on shares. and they are putting in more charging stations in this country. >> but we are worried about the department of energy and we are worried about the -- i'm thinking about the volt. the volt. we have had report after report, nobody wants it. why aren't they making natural gas cars? that's what people want because

natural gas is cheap. my friends are in the junk business, which i have. do not want to handle electric batteries. what happens when they wear out? no waste disposal place is going to want the batteries. think about that. >> we'll talk walgreens after the break. back in a minute. ♪ [ male announcer ] introducing a reason to look twice. the entirely new lexus es and the first-ever es hybrid. this is the pursuit of perfection.

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trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. there you have it. the tail end of the bell here on this tuesday morning on wall street. here's the big board doing the honors, the former british prime minister gordon brown for global education launching education first, an initiative to provide primary care to children globally. at the nasdaq, erickson equipment provider does the honor there is. lots to watch heading into the open. the case stiller numbers were positive across the board helping to put a bid on the markets right here. >> in all our surprise, that didn't have more staying power

after that. >> i totally faded into the close. there was a barclays note on housing this morning, so even though we have seen the data to back up a turn in the housing market, maybe we have already seen the anticipation in the stocks. >> rbc came out the other way. the battleground in housing is in keeping with the battleground in transports, the battleground in steel, these are all -- i was mentioning to david while talking beforehand, these are things -- how bad is the slow down? we don't know. >> it's the question everybody asks. >> yeah. >> slowdown is a word some might take issue with. >> 4.5 million autos. the housing is going up, not down. maybe it is going at a different pace about it. >> a lot of talk about commodity prices, specifically protein and poultry. apparently we'll have a bacon shortage in this country relatively soon and pork because of the drought and corn prices.

at the same time, buffalo wild wings today gets an upgrade because rbc thinks inflation won't be as bad as some think. >> thinking the chicken wing prices can only go up. they have gone up dramatically. i think the ceo has done a remarkable job with the company. i continue to think that conning a ra and general mills are saying do not fret, we are going to handle this. that's one of the big surprises of the quarter. the company that is buy commodi commodities are saying don't worry, so it's a nice change of pace. >> you mentioned the battleground in transports and there's a battleground because they are not confirming the rally we have seen in the s&p 500. that's what a lot of the people would like to see. and the bounce after the fedex earnings and the nfc nonexistent. yesterday, finally, they were able to string together a gain. but in today's session they are pretty lackluster and just have not bounced as you might have

thought they would have after selling off so sharply on the back end of the results. >> the industrials are behind the market by 550 basis points, so it is not unknown. i don't know. tough, tough call. >> mark colbert has a great piece on market watch going back to '79 and sees an inverse correlation between transports and the markets. there is no statistical report for the notion that dow transports and weakness is simulating imminent wreckage. >> holy cow. these are not -- they are statistics. i do have to say that coal is just -- it is very rare you see a commodity that just falls off a cliff, but the combination of the epa saying, listen, we need carbon capture, i mean, wisconsin, one of the greater areas, they tried so hard to do

the carbon capture. it can't be done. >> david, we don't have a lot of information yet of what marissa meyer is going to tell her employees, but we can speculate. >> we can start right now but i don't know where to start in terms of speculation, what she'll choose to focus on. there's been plenty written about it. there was so much activist money in there, i wouldn't call it "fast money" but also "fast money" to a certain extent. this is the result of alibaba. this was a taxable deal. they are returning much of the proceeds to shareholders but the stock has done absolutely nothing and now many of the shareholders including dan low who got in there for the big return of capital and the pop that goes along with it are now onboard with meyer and whatever turnaround plan she's going to present having followed carol

barts at the company, the permanent ceo. we'll see. >> this could be a house-like situation. >> oh, like the tv show "house." love that show. >> right in the end, house solves it, a quarter of. is there a house? maybe she's house? >> that would be a reason to continue in the stock. olivia wild? i think she's your type, actually. google shares, new high in google up 1.25%. and apple, jim, continues under pressure. i wonder if you start thinking that maybe it's not just they didn't have enough bones in the channel but actual supply constraints they are still dealing with. >> i look at it from a certain point. if you haven't bought apple at 700 you probably do get

interested. somebody hit up jim kramer and said, you're flip-flopping. wait a second, there are times when it is right to just buy apple and there are times when you want to hold off. there are times when it is right to buy google. i never made a lot of money being stupid. it is not a great exercise. i'm going to be stupid and be like a politician. my view is social security should be cut -- no, this is not politi politics. there are moments when and is getting it right. we are not supposed to be dogmatic when talking about stocks. this is not a presidential race between google and apple. right now there's just, google has a little momentum and apple doesn't. >> one who does not have momentum is rimm. there's rimm jam giving us a look at the 10, but it won't be available any time soon. not getting any traction. >> nokia phones.

here's what's happening n the next 24 hours the near rim is going to sell itself. and then they will announce that they are not for sale so you'll have a little spike and down turn. it will play out at -- >> you have to andize the portfolio to get a glance at the intellectual profile. >> motorola, mahaney said all the packages were clearly a bargain. >> there have been other stock that is have soared on that same kind of metric and it has not worked. you have to take it company? what's your club estimate? >> that's your job, my friend.

>> you come out right here and i say it is time to stop buying rimm. then i look at these things and just say, hey, you just said that, i'm tweeting that. >> no! then i look at rimm and go why? i would rather them starting to think about it. but at one point somebody is going to say the patterns are worth a great deal. the key word is great. i always type the roll letters in my app. always. >> the a and l are the toughest combinations. >> you may be saying seattle wins but -- it's like harvard beats you 24-7. and i saw a gray one that said something like a high-end

pause -- i know he said to me, listen, these guys will be equal mistake people. they will make mistakes for both, but the last-second mistake and you can't go to the commissioner. he wants the wind at the packers. >> the book is seriously -- somebody cared it to a flash crash in vegas. i don't know. >> they weren't involved. okay, good. i like night capital and hate to think they once again were dinged in this. imi want to make that clear. >> this is eye/hand failure. nothing to do with bats, right?

>> it has nothing to do with high-frequency training. courtney reagan is here with more. >> good morning to you, carl. we saw europe turn green ahead of our open. they had been trading lower earlier in the session. the dow here opening ant 26 points, almost a mirror image of what we saw yesterday in both the number and the action commodities. in the office of direction, yesterday they were under pressure and today we are seeing the opposite moves as the euro gets stronger. weakening we are seeing the movement follow through in gold. as a result some of the stocks are turning higher up above a percent.

jeffreys, regions financial and key bank. we all talked about caterpillar, look at joy global, commons, deere, under pressure after caterpillar said slowing sales could be under return. home builders, another big one to watch with the home prizes this morning. later in the week getting a number of downgrades today but also upping the pricing at the on linar and toll. david blitzer noted we are coming into a seasonably slow period, the winter. while things have been good, watch out for what's to come.

last but not least, look at the health care index as if we are seeing at a his or the tie. jim, back to you. let's check the bonds and the dollar with rick santelli in chicago. go ahead, rick. >> good morning, jim. well, there's very little doubt that housing is a pretty important aspect of the economy. and time does heal. we see kay shiller continue to improve. how did it affect the markets? you will clearly see when that came out at 9:00 eastern, that's when we made our high yield for the day. that's when we crossed into negative price territory, lower price, higher yield. but it drifted off a bit. if you look at the boon, same

thing. when you come to trading, you do pay attention to our data as well. same pattern they took out there with closing yield. it drifted further off to lower yield. it has always been about what's going on in europe from the germans' standpoint. and mario andretti on july 26, he affected or triggered that microphone activity based on this chart. ten minus two-year yields, the difference to spread in spain. and boy did it do what he wanted it to do. it's deepened dramatically but we are getting there where the 250 -- the last chart is the dollar/yen since year to date. why is this important? once again, we are ready to

challenge the seven-month low as we continue to see academies like the japanese unhappy about the strength of their company, and that's what most traders are looking at down here. back to you. thank you, rick santelli. when we come back, melissa heads uptown to times square . and melissa will talk to the new men between the partnership of amazon and nasdaq. here's a look at early morning movers, s&p, safeway, carnival. we are back in a moment.

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why they have a raise your rate cd. tonight our guest, thomas sargent.

nobel laureate in economics, and one of the most cited economists in the world. professor sargent, can you tell me what cd rates will be in two years? no. if he can't, no one can. that's why ally has a raise your rate cd. ally bank. your money needs an ally. all right. the dow is positive to the tune of about 12 points. some of the biggest winner this is morning, pfizer and home depot not bad on the heels of k.shiller. caterpillar is losing more than

2% at this hour. >> i thought cummins would be down a couple percents. i'm looking at the international companies and thinking there's a bit down underneath, joy should be down three bucks and it's only down a buck. there's always a bid underneath or some guy trying to catch up to the performance saying this is my price break. you have a remarkable market. >> you think this is an example of that just like fedex was a week ago? >> yeah. there are a lot of people who want in this market, not many who want out. >> you mentioned, of course, the poor guidance in terms of production, but they are also doing a following in order to raise more money and yet stock is down 6.5%. kors is off barely at all. that's a rocket ship. they are getting out big. >> i find one of the hallmarks

of the market is you expect things to be down much more than they are. and you don't say them down or find buyers midday. and that to me is portfolio madness. i got a chance, i can get it. i'm not up. i mean, that kind of voice in your head. >> you know the other side of the debate, mutual funds are largely invested already. the retail guy is not coming back. it is all hedge funds. >> i embarked on a plan to catch up with the averages. i slept at the office and sealed the windows so there was not a date if i failed. and it was every day catchup. when i saw caterpillar, i would take 100,000 in a bid. listen, i think i have a chance to make 48 cents! >> did you catch up? >> you bet. but not enough. not enough and the withdrawals were how rep douse. >> how many years did it take off your life?

>> people who were on the other end of that line. >> those were some of the worst calls ever. >> the phone was flying across the room and you're the greatest guy in the world. the run was i was not up enough for the averages, so therefore i wasser the le the mutual funds have long since left the marginal band of camp. >> last night's game between seattle and green bay only made things worse. a true labor relations nightmare for roger goodell. if you watched this controversial call, they gave the seahawks the win over the packers. one ref on the right signaling touchdown and the ref on the left signaling a touchback bringing us to this morning's on

your tweet. then they would have told you what and why to buy? check out your responses throughout the morning. this is all people can talk about. >> usually at 11:59 i don't get a lot of texts. i mean, this is one of those -- people are outraged, it is not a national game and it is a product. and the product is faulty and it should be recalled! >> he's throwing the gold up tape. andy generalings tries to rip it aaw aaway. >> this is not -- the whole game would be happening and i would hit you, okay? because i know the ref didn't see it and then i would hit you.

summit high had a big game last week. they are going to break the union union and yen the suv and that's how it all establishes. i was thinking about taking up a class. i would happy give some -- like i am right now -- >> i think you'll be joined by bill belichick, already the coaches who have lost their minds. >> if he's not suspended for it, exactly. >> this can feel like i'm doing the wrong thing, and i'm going to get five yours. i don't think you should do that. >> i'm being facetious but i

think everybody feels like enough is enough. i'm not going to give my statement here. those in the a 501 shall have c3 is losing value day of day because real estate and that's going down faster than kay shill shiller. >> that's right. >> when you come, you will know that this box is no longer what it was worth. it has turned into zenga. i need a tiny little piece. >> now i feel like it's a little machine. >> i'll buy a little corner from

you. when we come back, melissa myers is really looking to get out of yahoo!. that's coming up next. but first -- >> coming up, investing in this market can be quite the fact. which we have kramer who is help us avoid the mess when "squawk" returns. when you take a closer look... ...at the best schools in the world... ...you see they all have something very interesting in common. they have teachers... ...with a deeper knowledge of their subjects. as a result, their students achieve at a higher level. let's develop more stars in education. let's invest in our teachers...

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six stocks in 60 seconds. we'll begin with sony. >> people say apple would bottle next. that would be terrific. >> walgreens. >> i'm worried about the loss, but maybe this is a good call. they like the acquisition. >> second downgrade for marriott in a week. >> i like wyndhan, wyn. >> walmart. >> the dollars, it is back to where it was when they reported the shortfall. >> and the stock with 20 seconds tonight is paychex, i was facetious about this. i'm a lucky american to have the

disposable income and please don't -- please understand i'm having a little fun about the nfl refs. that's all. i'm not begrudging and i'm not -- it's like what a great country that i can afford, okay? >> meantime tonight, stocks have done well. >> do people think it was amiss? let's find out. people think red hot was lackluster. citrix the other day, i need to hear the two interviews to hear how i feel about the stocks. >> see you tonight, jim. thank you for an energetic hour. >> when we come back, we'll get consumer confidence in just a moment. bob, these projections... they're... optimistic. productivity up, costs down, time to market reduced...

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welcome back to "squawk on the street." the earnings are out better than expected. consumer confidence jumped up to 70.3. the best level since february of this year. and rich manufacturing is also a september number that moved to .4, that's a positive. positive .40 is the best level in the index since april of this

year when it was at positi positive .10. we have really come a long way. if you look at the equities, the dow was up before the number jumped to the 30s or 40s. if i didn't know better, i would say somebody is a claire voyant. back to you. on the heels of those numbers, barry dialer offering why it is a great idea to have child running facebook. we'll see if he likes. >> plus, the odd couple, nasdaq and amazon? is the cloud actually secure enough nor time of data snchlt melissa has the exclusive details. implts first you heard barry diller telling social companies

that if you bought stocks, what does he think about google? we interviewed barry diller for the morning show "squawk box." a great interview, andrew. >> thank you very much. we are still here at the ise headquarters here in new york and talked to barry diller. we talked about facebook that you talked about last hour. he's very positive on that company and that stock over the long-term, but he does say it is the long term. also mentioned yahoo!. marissa meyer coming out later today with plans about what to do with their future strategy. he was bullish on yahoo! as well, but perhaps the most bullish he was was on google staying they hoover up money. take a listen to this. >> after they figured out how to deliver search in a way that blew everyone else away, how efficient their advertising system is. how liquid it is, how efficient

it is, how brilliantly run it is. and there are people who say that google squanders money here, there and does all these other things. i tell you what they really do, they are a vacuum cleaner for revenue. and it's an unbelievably well built machine. >> hearing barry diller say that, pretty interesting from a guy who competes with them directly. in some cases he partnerships with them. ask.com obviously directly in that business, though they have moved away from search per se and moved into a question and answer site successfully. so interesting words from barry diller this morning. carl? >> andrew, just great work getting into the recovery of his topics in his candid manner. biggest surprise to you in terms of answers he gave? >> he wants to upend the tv business and the book publishing

business. and to see how he thinks about those issues on where it's going to go, for me that was some of the great takeaways and his great funny line about his trip to new jersey this morning on his way to teterboro. >> he should explain that being at the headquarters as you are, you are sitting inside a cube of television that is continuely project televisions at you. >> right. so right behind me is the highest depth, biggest wall in the world of the lobby of i.s.e. that does switch images as we speak. they do lots of different events here and what not. the frank gary building right across the street from chelsea piers for those who like to practice their shot. >> thank you. >> thank you, appreciate it. >> barry diller out defending facebook and mark zuckerberg getting slugged. take a listen at what he has to

say. >> if anybody knows anything about mark zuckerberg, he has the longest term value because he's a child. he's only going to run the company for long term. >> so no is the time to get in on facebook and give it -- barren says it is worth 15. then diller praising facebook. how can this be true? >> they compare facebook to google. google generates $28 per user per year. facebook previews are never above $5. you look at it for a minute basis, bookle monitoring 100 times better than facebook.

the idea facebook cannot jack up the number is $1200 annualry in the u.s. if they get to that level in europe, their revenue will grow by 15,000. it was a bad analysis, i am a bull because i have an evaluation that makes sense. this guy pulled 15 bucks out of his butt. >> drew barry, that's a good retort. paul, so much of the bearish case to michael's point is centered around a very bad call they made a very long time ago. that was underestimating the migration and we are focusing on desk top. the it fair to continue them with that, or was it such a bad call they did serve to be home

with it? >> the beerends article made it sound like they just discovered mobile when they have been talking about it before the ipo and put out an amendment to the s1 saying they know mobiles are challenged. that did not take them by surprise over the last few years, he tried to tell everyone very expolicive police italy. if you don't believe zuckerberg is really sincere about all the things and opportunities that are with mobile, then you believe the beerends article. so it is really -- it was totally unfair. >> mark, when they interview, it is saying you.

facebook is saying trust us. investors don't need to know about every pencil but they want to know about the strategy. it paints a negative saying in that regard. >> that's why the decline went down on what facebook is doing, what they are investing in. we know they are investing in mobile and that it is an important source of ad revenue. it will be grade if they just tell us that. the volatility is die due to executing their strategy quite well. >> what the article does is write very largely on the wall that facebook is a very significant stock-based issuer of compensation. and they highlight the amount of restricted stock they issued last year is about a half million dollars per employee and

continues to according to the article you get to a high b.e. tv in the store. what would you say to that? >> well, they are not getting a half billion away in stock-based revenue every year. that's 10% of their employees. and it is probably a number much bigger, more than 50 5 million employees for the top 10%. those guys are not getting 5 million a year either. it was a one-time grant that they get a f-150. so i think beerends is actinged as if it is going to continue in the future. >> are you seeing sign that is this is transparent? >> a little bit, yes. you see them working with the press to get certain articles focused on their mobile efforts.

zuckerberg did a great job in his talk a couple weeks ago that the rabat is -- obviously it is the big question that you don't know exactly what they are doing. you see little pieces along the way. pieces of a mobile -- it is proven, you ascribe to his vision or don't. >> guys, appreciate it. i can't think of a name with more controversy continued months after the ipo. that's incredible. michael paul, thanks a lot. the united general assembly's 67th session opens today with president obama getting ready to take the stage at any moment. conflict in the middle east will be one of the key topics of his speech. we are at the white house and joined with a quick preview. >> reporter: two main subjects on the aden gentleman going to

the yutss today. we are going to talk about the violence in the muslim streets that culminated into the american ambassador to libya. and he'll talk about the nuke lower armed iran. i was going to say there are no words for the innocence of the killing we have seen. there's also no video to justify an attack on an embassy. there's no slander that provides an excuse for people to burn a restaurant in lebanon or destroi a cool in tune this -- he does not think that the united states can live with the nuclear armed iran. carl, one point to think about as we think about the president's remarks here, he's been under fire f, and the obam

camp is making an important issue, obama is clearly walking a tightrope today and doesn't want to threat up his re-election chances. a very dell rat moment politically. >> not to mention anyone trying to drive in midtown manhattan. let's goat to headquarters with the market flash. shares of carnival are higher 3.5%. what we heard from them, better than that, at the same time, you'll see this tempered stock and this stock is trading higher. still ahead, marissa meyer announces her grand plan.

and "squawk on the street" will be live with both organizations.

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marissa mayer's vision for yahoo! is what we are talking about. >> we don't expect this to get underway until afternoon eastern time. that's when people get going here in silicone valley. over the past three months mayer has been in office here for two months. the stock has not done great but mayor is set to talk about the home page search and other areas to make her mark, specifically the home page yach. the world out there is that mayer plans to scale back a little bit the presence of ads there in order to approve the user experience. of course, the user experience at google is one of the areas where mayer had a lot of sway. very focused on keeping that as pure as possible. it will be interesting to see where she pushes that with

yahoo!. microsoft has not been great, they have not monotized that well. but mayer is looking to see where she cannot mess with the backend because microsoft controls that, but there's upfront ways yahoo! can differentiate the share. yahoo! at 12.8% market share in the latest numbers to come out for august. microsoft way up at 15.9% and google above 66%. yahoo! needs to gain ground because that's a third of revenue. we expect another meeting in a week. six days from now, we are seeing the vision, not the execution and structures will be put in place to make sure they achieve the vision she lays out today. of course, yahoo! stands right now with facebook gaining ground in display. they again are losing ground in search, so they are looking to make some of that up. and the stock hasn't done so well in the past couple months but we'll see if some of the changes announced today can do something about that.

carl? >> from the iphone 5 to this, john, your beat is on fire every day. we'll talk to you a little later. john fork in sunnyvale. when we come back, caterpillar the biggest loser on the dow today. we'll talk about the company's warning for 2015, but does the pullback mean now is the time to jump in? more "squawk on the street" when we come back. ♪ [ male announcer ] this is karen and jeremiah. they don't know it yet, but they're gonna fall in love, get married, have a couple of kids, [ children laughing ] move to the country, and live a long, happy life together

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president obama has made his way to midtown manhattan and addressing the u.n. general assembly. he's expected to talk about the recent attack on the u.s. diplomatic post in benghazi saying there's no justification for that attack. and expected to say the u.s. in his words will do what we must to prevent iran from obtaining a nuclear weapon. the speech will stream live on cbs.com if you want to see more of it. >> and this is important with romney saying he's not being tough enough on iran. and the papers this morning have a peace symbol. very potent particularly on this day in the jewish calendar. shares of caterpillar are down this morning due to

concerns about the global economy. and specifically capital expenditure from commodity producers. what does cat's warning mean for global investors? let's go trade in the globe. tim seymour is joining us from asset management and founder of the mergemoney.com. what does it mean? >> well, if you look at what caterpillar said in 2012, it is different than 2011 when they said the world is a wash in demand. they were concerned about meeting capacity. yesterday they were really saying and pointing squarely at dealers in china and even in latin america where they think there's an inventory overhang they need to work through. the bottom line is they are saying the world is moderately better. that we're going to see somewhat tempered but real global growth. and i think to go out and sell miners here on the back of what caterpillar says is cautious. if you listen to what reo tinto or bhp said a couple weeks ago

in regard to new investment, i think they said the same story. structurally if you look over the next five to ten years, we could be in a different place. in the short-term here and now, there's a good trade on the miners. if anything, i might be fading a deere but looking to buy people like tech cominko, tck. gold, copper, the plays on the miners really beaten up if you look at the global growth story are the ones you want to pay attention to. at the end of the day, china announced major infrastructure projects. i talked to guys in brazil yesterday who said the policies on simulating structure growth is having an impact on demand. so the material guys down there say it's far from done. >> tim seymour, thank you. you can catch more global trades from tim every weeknight on "fast money" and tuesdays here on "squawk on the street." this controversial call gave the seahawks a win over the

packers last night. the latest controversy surrounding the replacement referee miss the nfl brings us to the morning's talk on the tweet. for your portfolio, nfl replacement refs would have told you to buy blank. tweet us and let us know. and the results on cnbc's propriority survey still ahead. and morgan stanley is about to find out if the reception of its new monaco will be as sweet. how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments.

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we are an hour into trading. some of the stories we are squawking about, 10:28 on wall street. the home price index showing home prices rose sharply in july for the fourth straight month. up 1.6%. the highest level in nearly two years. carnival one of the biggest gainers on the s&p after reporting better than expected third quarter results. they said booking volumes rose 9% for the last six weeks. and staples falling sharply after announcing a restructuring plan that includes cutting its

north american retail square footage by about 15% by the end of 2015. cnbc is out with its propriority economic survey this morning. and with the huge gains we have seen in the markets recently, what does it tell us about whether now is the time to further jump into stocks? steve liesman has more back at hq. good morning to you, steve. >> i might have an answer to that, but the poll of 800 americans across the country, we have been asking, is this a good time or bad time to invest in stocks? trying to get ordinary americans to weigh in on the market, not just investors. here's what the data shows. you still see pretty downbeat on stocks. the red line saying 48% of america thinks it's a bad time to invest in stocks. just down a little bit. only 30% say it's a good time. a little bump up in those, maybe some people are on the fence, but this chart tells you n general, what we think is that the retail investor has not

participated in this rally. that's what i think the data is showing us right now. now we'll take another slice of this and look at what we call the financial elite. who are these people? we have incomes of at least 75,000 out of at least 50,000 in the market. what you see there is pretty much the reverse of the general public. 50% say this is a good time to invest in stocks. 34% say a bad time. look how much it's come down from where it was before the recession started. but there may be something that's happening here, which is we may be able to use this now. we have been doing this long enough as an indicator, which is contrite because the guys were supposed to know. but take a look at what's been happening here. here's the s&p 500 over this time. you had this rise here, they really decreased their optimism on stock. now look at three points i want you to see. this point here, high pessimism, the market goes up. this point here, high pessimism, market goes up. third point, high pessimism,

market goes up. now we are at low pessimism, so we are not going to get the rise we've had. now we've also asked people, are you better or worse off than four years ago on the economy and jobs? what about your stock market values and what we'll see here is how much politics colors people's views on economics and stocks. so for the overall public, 34% say their portfolios are better than four years ago. 29% say worse. and about the same say it's the same. look at the difference between republicans and democrats. is it possible that democrats are better investors than republicans? i don't think so. i think it has to do with who is the president right now. 47% of democrats say their portfolio is better than it was four years ago. 41% of republicans say their portfolio is worse. where do independents come in? 34/34. this is telling us, what was the s&p return over the last four

years? 80%. that is eye-opening to me. something that we can prove what happened. people don't see it. i think because what our pollsters are telling us is more and more we are viewing the economy through political lenses. for more exclusive results, go to cnbc.com. we have a full write-up on this and you can look at the entire poll, david. all right. thank you very much, steve liesman. it's official, morgan stanley dropping the smith barney name from its retail brokerage. as seen in the full page spread of the "wall street journal." our mary thompson sat down with greg flemming who runs retail and high-end, all wealth management. mary, you had a lot on the agenda, didn't you? >> that's right. we also took the time to speak to him about facebook. of course, it was a high-profile ipo and his troops were on the front lines during that public offering with morgan stanley as the lead underwriter with 17,000

brokers flemming manages dealing directly with the disappointed investors. fleming dealing with the frustrated brokers. he said the consistent ipo was far from a high point for the firm. talking about execution, you know, the facebook debacle for lack of a better term, i guess -- >> we would give you a different term. >> how much did that hurt you? how much did your clients say, whoa, this was not handled well, we are not sure that we want to, you know, give you more money at this point until we're sure that everything is handled correctly? >> well, again, the relationship -- i talked to a number of clients on that. if a client steps into an ipo at one price, then the price is down dramatically over the ensuing three, four, five months, the client is not going to be happy. and the financial adviser is not going to be happy it went in that direction either.

this isn't the first time it's happened in the ipo market. for us, particularly on the wealth management side, facebook was an example of a strength that we are going to continue to pursue. we think it's better for our advisers and our clients if we are the leading book runner on ipos and secondaries. and if we are able to bring that product to our advisers and their clients, and we are going continue to do to that to make the product available. that's what our financial advisers are looking for as well. the strategy of linking investment to managing in that sense, where we are on the transaction, because of that we are able to provide stock to our clients. we think that's the strategy that leverages morgan stanley's strengths and won't back away from it. >> you can find more from the interview at cnbc.com.

simon, back to you. thank you very much, mary. an hour and four minutes into trading. let's get a market flash with jackie. >> good to see you this morning. we are watching shares of zilo down 6% at this point right now because of the negative analyst report from citron research calling this ridiculous. the drop in the stock is $2.74. carl? another name that gets talked about a lot, thank you, jackie. with regulators requiring financial firms to hold on to more data for longer, nasdaq is turning to an unlikely partner. it's amazon. is the cloud secure enough or could a breach drown the best of intentions? plus yahoo's new ceo swimming upstream and now laying out her long-term plan to make it rain once again at the fallen search giant. [ male announcer ] when a major hospital

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if you think you're apartment is small, think again. san francisco is considering allowing microapartments to encourage affordable living. our jane wells live on the set yesterday is now live at her own micro apartment back at hq. jane, sol of us in new york have lived in pretty small spaces. how small we talking? >> smaller than you can think of. probably about the size of my hotel room on the upper west side. welcome to my new gnome right in front of the cbs wall. san francisco may approve apartments as big as 220-square-feet. that's five yards by five yards. here it is. if i walk it out here, if one stride is a yard, one, two, three, four, five. and then one, two -- you can go, they make me wear these heels so

i'm not going to keep walking. that's the whole apartment, living room, bathroom and closet. by the way they have apartments as little as 295-square-feet. but this would be tinier than the little apartments mayor bloomberg is building in a test program which are up to 300-square-feet. apartments so small you could not put a big gulp in them. what may the layout look like? you are looking through the roof at a rendering. you have a bathroom with a bathtub, you have a bed and kind of a couch here with also maybe an extra bed there. that would be the whole living space. and, in fact, what they are saying, that the living room alone aside from the bathroom, kitchen and closet has to be 150 square feet. is there a closet over there? i don't know, maybe that's where the fridge is supposed to go. that would basically be the space soft three prison cells. rents for the micro apartments could range from $1200 to $1700

a month. the average in san francisco is a little over $2,000. 40% of san francisco residents live alone and this would give them more affordable housing, but it could drive families out of san francisco. what's next? dim lighting? >> you would have to be very young and very in love for two of you to live in that co-dependent. >> david, how small was your smallest apartment? >> my studio was about 450 square feet. it was a nice size. it was the old l-shaped studio. i have seen far smaller on the upper east side in small townhouses where somebody had an upstairs room like that. >> i hope they don't start having pets as well. you fear for the trees. >> this really is a doghouse. >> carl, how about you? >> i did about 600 square feet. two people.

>> wow. >> jane, you could be a realtor. just watching you demo that right there. >> i know. i have waited for so long to do the walk of the wall. i didn't eat carbs for two weeks so that i could -- i'm sucking it in. yes, i did wear the wrong shoes. >> but they look good. >> thank you. >> i wish we had you here all the time. thank you. up next we'll talk to the nasdaq about its new partnership with amazon. but first, rick santelli working on the next hour of "squawk on the street" in chicago. good morning. >> good morning, simon. we had some better-than-expected housing data out today, so what we'll do on the santelli exchange is look at the good, the bad and the ugly regarding housing and acknowledging that time on one hand does heal all wounds, and if we are going to get the economy cooking in grease, housing has to be a key character in that recovery novel all at the top of the hour. americans are always ready to work hard for a better future.

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nasdaq and amazon are heading to the cloud. eric knoll is the head of transaction services here at the nasdaq. andy is head of the cloud web

services. good to see you. eric, explain about the deal broker dealings now have. >> in today's world broker dealings have to store an extreme amount of customer data, trade tickets, orders, customer communications, and they are required by regulation to store them for seven years and have them readily accessible for regulators. that storage expense has grown to become very expensive. in today's complicated world, those storage costs have grown and grown and grown. by partnering with amazon here, what we think we are able to do is offer a lower cost solution to reduce the cost for broker dealers for their storage and retention requirements from the regulators. we are estimating that we think it should be cost savings up to 80% on broker dealings who take advantage of this service. >> it saves the brokers money in terms of storing this tremendous

amount of data, but its also revenue for the nasdaq. >> we think we can make it a revenue stream for amazon and lower costs for our broker community. i want to be clear this is not a nasdaq-only offering. and it is not related to our match. it is not related to trading on nasdaq. this is for all brokers no matter where their activity is. it will enable us to offer them a lower-cost solution for their storage and record retention needs. >> the necessity of this has been born out of increased regulation, andy. so in terms of stream for you and a growth area, is the financial services industry a huge growth area for the cloud? >> it is. we've had financial services company using aws for a long time. >> amazon web services. >> yes, aws. nasdaq has been using us for six years at this point. the reason the cloud is so compelling to the financial services industry is for three primary reasons.

first it lessens trade and capital expense. instead of laying out the money for data servers, they get to spend the money as they consume it and only pay for what they use. second of all, the variable expense is less than they can do on their own because aws using the large scale to pass on the cost savings to its customers. then third, it allows companies to get technology projects done much more quickly. and without having to use their scarce resources who are software develop engineers to differentiate heavy lifting of infrastructure. it's a really great proposition. >> when people think of amazon, they think of the shopping carts and what you can buy, but not web services. but aws is a 6-year-old unit of amazon and is fast growing. can you give us the indication how big this is becoming in terms of revenues for amazon? >> aws has hundreds of thousands of customers at this point. and over 190 countries.

it is growing very dramatically. we believe that the company in the fullness of time has the chance to be at least as our biggest retail business, saying a lot given the retail business is a $40 billion business. >> amazon has a web company but when you're talking about the fullness of time, you're talking more than a decade at this point? give us some indication. >> i don't know if it is 10 years from now or 20 years from now, but we are building the technology platform that every company can run on top of. >> they estimated 15% of corporate functions exist in the cloud. is that how you think about the growth potential of this particular business? >> it is very large. it reminds me of 150 years ago most companies generated their own electricity on premises. that felt like a completely natural thing to do. when the grid came about, the economies were such it did not make sense to generate your own electricity. i think we are at the beginning of a similar shift in computing where in the fullness of time

very few companies will own their own data centers because the economies in the cloud are so great it is not going to be cost effective to run your own data center. >> the question about the cloud, eric, is security and how secure is the cloud? the nasdaq a couple years ago suffered a hack attack into its. and you made it clear that it wasn't anything sensitive that was stolen or hacked into. but still there are concerns out there. >> i think there are always going to be concerns about data security. i'll certainly let andy talk about the great lengths aws goes through to protect security. i think one of the things we're trying to do here is add additional layers of security around this information. cyber attacks are a reality of today's modern society. we'll have to deal with them. i think they are attacks on stand-alone units as well as other sources of data out there. but what we're going to be working with amazon on is not only taking their security protections but adding layers on through nasdaq as well in order

to preserve the sanctity of this information of users of the cloud with us. >> we were talking about how busy the past few months have been for you, eric, especially after the facebook ipo. what have you added into the trading platform to ensure these glitches will not happen again? >> in our accommodation filing with the s.e.c., quite lengthy document. it talks a lot about some of the things that happened on that day and how we've addressed those. we're clearly looked at how we are changing the way technology's introduced here. we're heavily engaged in efforts. we retained ibm to work with us on that. we're heavily engaged in improving our processes to make sure these kind of indents don't happen again. >> can you say with 100% certainty the glitches we saw with the facebook ipo will not happen again? >> i don't think anyone can say with 100% certainty that any tech glitches will never happen again. i think what the important thing is, is that we recognize it as

an important thing we have to address. i think it's true for the industry at large. not just for nasdaq, but i think it's true for the financial services industry at large. technology will fail and it will fail at various times in various ways. oftentimes unforeseen. i think the efforts we have to focus on as an industry and as an exchange is that we deliver the very highest result we can, given the circumstances that we're in. actually, that has a lot to do with why we're partnering with amazon here. which is we think their expertise is on the infrastructure on data storage. they bring real leading knowledge in that space. our expertise is how we deal with broker/dealers, what the requirement is for broker/dealers for data storage. the combination of those two things is an example of how we can improve the way we operate our markets today. >> it sounds like a lot of what happened surrounding the facebook ipo has been put to rest. the parties' losses have been

compensated. hardly a day goes by when facebook isn't mentioned and botched ipo because of problems at the nasdaq. that must sting a little bit. >> it isn't so much that it stings. it's a reality of which we have to work with today. we have to earn our credibility back. we have to continue to demonstrate to the marketplace, as i think we have, that we are the best place for listed companies. we are the best place for trading. we are the best place for new innovative ideas like the fin cloud. we intend to do that every day. >> we're going to leave it there. thank you for your time. eric knoll of the nasdaq, andy simon. ahead in the program, could caterpillar be the canary in the coal mine? faster than expected slowdown could say about the global economy. tweet time. one controversy after another with the nfl's replacement refs in last night's game between seattle and green bay only made

things worse. a controversial call give the seahawks the win over the packers. you see two different calls there from the officials. so, if your portfolio was decided on by nfl replacement refs they would have told you to buy what and here's why. tweet us and we'll read your answers next. [ male announcer ] you are a business pro.

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welcome back to "squawk on the street." market flash on veil resorts. watching this stock getting a 10% pop here today because reported narrower than expected loss in its fiscal fourth quart quarter, helped by 11% jump from ski resorts in colorado and california. the stock got hit with the mild winter so hoping we see snow this year. >> thank you very much. let's get the "squawk on the tweet" this morning. it's one controversy after another with nfl replacement refs in between the seahawks and packers just made it worse. the controversial call gave the seahawks a win. the question is, if your portfolio was decided by an nfl

replacement ref, they would have told you to buy what and why? mike writes, buy facebook because mark zuckerberg is a cool dude. and walsh rights, linkedin because people should stick to their day jobs. i'll tell you what, these replacement refs don't have many friend. largely a one-sided debate. watching tech names? >> google, the stock is up another 1.5%, all-time high. i was hoping we could look at ten years of microsoft versus google because they're coming very close to having the same market value. i believe it would be the first time for doing toll eclipse microsoft that that would be the case. we're talking about large numbers, $245 billion, $260 billion for microsoft. shows you the accretion for google but microsoft has had a

big move. >> he was saying goolg was a vacuum cleaner in terms of hoovering up revenue. >> takes me back to the time when people said google wants to go into vertical integration, wants their own phone, that's crazy and now you see the synergies that come from licensing software and having web services. >> analysts are speaking positive about the mobility acquisition, completed not that long ago. they put their own management team in place. they've had significant layoffs at motorola mobility, which i'm having trouble saying. the key will be, are we going to see new devices from this google-owned handset maker, in addition to the intellectual -- i can't talk anymore -- intellectual property. >> another company that overcame early concerns over very young, unseasoned ceos. >> no adults in charge was the charge for many years at google. >> facebook, you have dealers

saying he's a child -- >> he says long term. let's not forget, larry page runs the company at google, one of the founders. cfo, not new anymore, but did take charge of google's spending money. they still spend a lot of money but they're much more disciplined. that helped bring wall street along. >> seems like every quarter used to complain about sg & a. doesn't happen snim. here's what you might have missed if you're just tuning in. welcome to hour three of "squawk on the street." here's what's happening so far. 4. >> the president has made very clear he wants taxes to go up. again, if mitt romney wins this thing, which i think he will, he's already said, we don't think taxes should go up, especially in a difficult economy. >> this is not a national tragedy. they sold their stock high. if you're going to sell stock, sell it high.

>> hold on. so you don't think -- if you were facebook, you don't think of this ipo as a failure for facebook? >> no, i actually don't. >> it's got -- >> any company that has mobile working on the end, it's google. it's not facebook, it's google. >> looking at numbers on starts, existing home sales, new home sales will come in tomorrow. in general, housing is bad. >> it's going down in value and i'm getting upset. you'll know, you'll know, when you come to the box, you'll know this box is no longer worth what it once was. this is turned into zynga. >> consumer confidence jumped up to 70.3, the bst level since february of this year. >> i think we're at the beginning of a similar shift in computing where in the fullness of time, very few companies are going to own their own data centers because the economies of

the cloud are so great, it's not going to be cost effective to run your own data center. good tuesday morning. we are live at new york stock exchange. let's get a check of the markets. dow is higher by 60 points. we are once again on track for the biggest percentage and point gain for the dow since october of last year. largely built on some improved home price sales. home prices earlier with case-shiller and good confidence numbers in the month of september up sharply from the month of august. google trading around new all-time highs today. eric schmidt says there won't be a maps app for the iphone 5 soon and apple should have retained google maps. red hat falling sharply after the second quarter estimate missed analyst estimates. let's get to the road map this morning. after two months on the job,

yahoo! ceo marissa mayer announcing her turn-around plan to employees. we'll show you what she inside a companywide memo. caterpillar cutting sales expectations for the next few years. will cat be able to overcome the economic problems around the globe or is it time to sell? one of the youngest companies featured in apple's new operating system and already has 500,000 users. we'll tell you what the future has for belly when we talk to the company's ceo and co-founder. tesla stock sliding after they announced new charging for electric vehicles. all that is coming up in the next hour. we'll start with yahoo! marissa mayer playing to revooel veal her plan. she'll likely introduce progress and goal tracking as a measure of performance. cara swisher, co-executive editor for all things "d" joins us on the news line.

good to have you back. >> thanks a lot. what will the headline be this afternoon? >> i don't know. she's put a lot in the memo we obtained, talking about goals for the company and trying to put the company on strict benchmarks. i think she'll focus in on a couple things. one is search, improving search results. the relationship with microsoft has been a bust, essentially. she knows search so she'll focus in on where she knows how to make money. second thing is ad tech. we believe she'll make acquisitions in the ad tech area and improve yahoo! as ad platform which has been lagging. an area she doesn't know quite as well but certainly knows better than some people. and the third is looking -- taking the key properties of yahoo! including the home page, and really focusing in on them, including a redesign of the home page to make it more of a platform. >> you cite some sources who call it a little bit facebook-like.

what do they mean? >> well, you know, in that people -- it's not -- the portal is dead. yahoo! -- people don't find things on the web that way. so, she's got to have a much more interactive cite -- i mean, a site that has more where people can go and come back to. a lot more linking out. a lot more ability to put apps on that page. more of a dashboard than a portal, i think pip haven. i haven't -- it's very difficult to redesign in today's world. even as, you know, they redesign their home page, everybody's going mobile. so, she's got to have a strong mobile strategy, which yahoo! has none of at this point. >> right. you point out in your story, that remain one of the holes, at least, that we've not heard a lot about. is that going to change any time soon? >> well, one would hope. people seem to like their cell phones. it's incredible that yahoo! is missing mobile because they don't have a mobile strategy.

they have apps and things like that. think about all the things that have happened, instagram and all these terrific apps and yahoo! has been nowhere in it and it's pretty glaring. >> where do you think this all alibaba money is going to be spent? is there going to be a purchase in the next 12 to 18 months? >> she had to give back some of the money. first they decided to possibly have her keep the money. she announced that rather dramatically in a regulatory filing. that backfired with investors. so, she has about $600 million plus the $2.6 billion they have. it's not quite enough to buy big things, compared to google and apple and others, who have huge kitties to buy things, including strong stocks. google stock is massive right now. so, i think she'll buy a lot of little things and try to get talent in there. >> well, having you on to talk about it is almost as good as

having her on herself, so we appreciate -- >> no, i don't think so. she knows what's really going on there, but i'm trying. >> kara, thanks so much. i know you're busier. kara swisher from allthingsd. gary conce again. >> i was doing a ross westgate imitation with the big tie. carl, every day with these segments we try to bring the viewers sort of the conversation that's happening within the professional investment world, the kind of things people are talking about and last night it came to my attention that we continue to have a number of people trying to focus on how is the s&p, where it is, when in fact we know retail investors, we know mutual fund equity flows have essentially been negative forever. for a long period of time. here might be one of the answers. interestingly, a gentleman out in the hills of pennsylvania, been an investment professional for decades, pointed out to me to take a look at the buy back data. i did that. when i got some of the data that

actually the source of the information was tom lee, great strategist at jpmorgan. i like when someone points something to me, tom lou who's been dead right on the market. corporate buybacks going from 2007 to recent. you see the numbers in terms of what they are. this is the sort of gem behind this. if you look at the mutual fund flows, negative flows out of equities and you take a look, for example, 2010-2011, $200 billion come out of net equity. net equity outflows out of mutual funds, area ctfs. if you take a look at the amount of buybacks, companies buying back the same shares the mutual fund managers are selling because in the redemptions it's quite interesting, it's $400 billion. what does if all mean? it's simple. if you go back to 1990-94 period as tom lee did, look at the buy back data, buybacks represented 15% of inflows. purchasing stocks here at the big board. buying of shares.

today that number is 81%. so, one of the reasons why you're not seeing the retail exit out of equities having the kind of impact many thing it would. it's essentially -- it's a basic trade there. retail selling, mutual fund managers selling, companies buying it back. 81% from 15%. this is the kind of stuff people talk about. really interesting. >> i mean n general, is it -- what kind of indicator is it for future performance? >> well, what the indicator says to me -- you know i look at cash flow, what you do with that cash flow. buybacks the third or fourth ranked use of capital. first organic growth, second is dividends. this is confirmation that companies look inward, do the same thing in buyback shares that's why you see buybacks increasing. it says more about companies than the overall market about their inward focus and not wanting to invest in the businesses. >> nike just comes to mind. >> that 81% number has to go up

as companies continue to do. >> let's get to chicago and economic in with rick, tuesday edition of "the santelli exchange." >> like many things in the current environment we're in, housing has had some improvement. but some improvement in election year becomes just a hot-button topic. if you've had improvement in jobs or you've had some improvement in gdp or some improvement in housing, of course that's a good thing. but let's take the politics and toss it out and really look at what we have. now, if we start out -- let's look at a chart going back to 2004, new home sales. now, as you look at that chart, definitely there's improvement. but it's still nowhere where it was before the crisis. existing home sales. a similar pattern. improvement, yes. is it where we want to be? no. today we had case-shiller. before we go to a bigger chart,

let's look at the 20 composite, nonseasonally adjusted just for 2012. wow, looks pretty good. but the point of this is to step back now and lets show a line chart going back to 2003. you can see, we are way off the best levels. so, what is the point of this? the point is, is that we know where we need to be and improvement is good. but we can't just be happy here. it's not enough. so, whether you're looking at tax revenues, whether you're looking at baseline spending, whether you're looking at jobs, whether you're looking at the total amount of employed people in the country, the notion that politics makes us happy with improvement is fine. but in the end, whether it's spain, catalonia, all the countries that have had some improvement, whether it's in funding or their economic fundamentals, the reality is that it is a long-shot, far placed from where we need to go. the programs we have in place don't seem to correlate with much of the improvement. time heals all wounds but we

need to do better. we need to move outside the box. that really is the point of this. i don't have all the answers. one thing i can tell you, these charts are moving too slowly. the trillions are adding up too quickly. we need to do better. back to you. >> rick, we'll see you in a little bit. busy day for you. when we come back, running america's schools like a business. the man with a new lesson plan explains why $40,000 a year in tuition might be the best investment you can make. cat on an economic slowdown. how much of a bigger picture indicator is it? is loyalty the next big thing in technology we'll find out in our "squawk on the verge." greetings from the windy city of chicago. people here sure are friendly but some have had a hard time understanding my accent. so to make sure people get every word of the geico savings message i've been practicing how to talk like a true chicagoan.

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welcome back to "squawk on the street," a quick market flash. we're looking at shares of staples revealing plans to close stores in the u.s. also in europe. selling its european printing business. the company also saying structuring is going to include combining lines of business to improve online offerings. we're not seeing plans for a sale. that boosted shares but this news is taking shares down 4.25% today. >> thank you very much. competition to get into the right college is growing increasingly tougher. what about elementary schools? here with us is a man who believes schools should be run more like a business and education treated more like a product. chris whittle, good morning to

you. >> thanks for having me. >> this has been talked about a lot. i like the headline, move over dalton. you've been working on this for a while. what's different and what are you trying say about education in this country as a result? >> we're building what we think of as the first global school. the campus we opened was 740 children and a staff of 170 about 12 days ago here in manhattan is the first of 20 campuses around the globe in the world's great cities. >> what do you provide the myriad of expensive private schools in manhattan don't? >> one of the features attracting firnts oparents to ol is ee mergs. a child at age 3 has two classrooms. for example, half the day they're in their chinese clam roos, half the day they're in their english classroom. for seven years they go to half

their day in mandarin and half of their day in english. we do the same thing in a spanish track. that produces bilingual children, which is very important for their future. >> you conceived of this idea back in 2007, the financial crisis made it awfully tough to do that then. we spent so much time talking about income poe llarity and th way the rich are separating farther from the poor. why go after an audience that has an embarrassment of riches and getting richer. if you were going to try to reform education, why not do it at the bottom? >> i spent 20 years opening charter schools in the united states and remain very involved in the education reform movement. reform can come from many places. one of the great advantages of private education is you have complete freedom from most regulations, from most union

situations to really innovate. i like to say, there are no patents in education. the things we do will travel to schools all over the world. >> it is for profit, we should make that point. how much money can you make in this business? >> we raised $75 million of equity, which we invested in our new york campus. as we go forward, we'll be raising other equity worldwide. in order to do that, we have to produce returns that are attractive to the private equity backers that we are supported by. >> and i would imagine given what manhattan incomes are like, you have pricing power, as we like to say in business news. >> we're priced literally where the other schools in the school are priced. that's a similar strategy that we'll use worldwide. we basically took the average of the top 15 schools and priced it at that point. >> well, it's going to get a lot of tangs.

deservedly so. hopefully for all who go there. thank you for your time. when we come back, rick santelli is asking, is it possible for the markets to have an orderly correction after the elections? we'll count you down to the close in europe as well. about 11 minutes to go. [ man ] not only that,

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wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners. [ male announcer ] fedex office. if we want to improve our schools... ...what should we invest in? maybe new buildings? what about updated equipment? they can help, but recent research shows... ...nothing transforms schools like investing in advanced teacher education. let's build a strong foundation. let's invest in our teachers so they can inspire our students. let's solve this.

presidential candidate mitt romney talking at the clinton global initiative but not before adding an aside about what he hopes to get out of the conference. take a listen. >> thank you, mr. president, it's an honor to be here this morning. i appreciate your kind words and the introduction is very touching. if there's one thing we learned in this election season, by the way, it is a few words from bill clinton can do a man a lot of good. all i got to do now is wait a couple days for that bounce to happen.

>> rick santelli, after the election, we're going to talk a lot about what the markets do post-election day, right? >> yes, yes. and i'll tell you what, my notion of what's going to occur on november 7th has really changed a bit the more i talk to people that run mutual funds, people that trade large positions, hedgies, so i have my buddy dan to discuss this and many other things. first of all, do you think that there are certain combinations, whether it's the republicans run the table or the democrats run the table, where we could get one really wild november 7th? >> i think we have a wild november 7th no matter what goes on because you have a lot of different opposing forces. i don't see them easing up any time soon. there's going to be a lot of bitterness to get over. once we see where we're at we'll make a decision where it goes. >> you talk to a lot of people, i talk to a lot of people. over the last six to seven weeks -- six, seven weeks ago i heard, we're not woertd about it.

they're going to cave like they have the last couple of years. not a big deal. but i see a lot of perspiration on foreheads as weeks tick off and we get closer and closer. >> you can look at polls but wisconsin is a clear example of how polls are going wrong. governor scott walker and his recall was to be close but he trounced them. i'm not believing any poll. the real poll is november 7th. close the curtain. >> like numbers, today, it looked to me before the confidence numbers the market moved higher. i said, maybe there's somebody clairvoyant out there. traders lose nerve, 30 seconds, 29, all of a sudden 15 seconds out, i don't want this position. they take it off. do you see that kind of pre-november 6th dynamic? are some big institutions going to lose their nerve riding it out? >> i think so. the stock market's rallied considerably, really, really well going into this thing. the what-ifs are out there and the what-ifs affect this market big.

if we have any type of combination that even hints at bad news out there, there's going to be a lot of money taken off the table. i'm not confident going into the elections right now in terms of the stock market. >> one thing everybody's walking on eggs on, so i just smashed a bunch of eggs, here's what i want to talk about. i remember the first couple of months of the president obama's administration. i ran to the bit, too many things happening too fast. first t.a.r.p., auto industry, stimulus, home modification and the deficits are going up, up, up. so i blew a valve on it. what would it be like to have this president with a lame duck scenario where he has no governor, where he can do without the notion that he has to get re-elected again. do you see this as a big market issue, in terms of dividend taxes, obama care, taxes and higher fees there? >> i most certainly do. i think he's going to try to push his agenda. some people want to look back too the clinton years when he

lost big time in the midterms just as obama did. >> november '93. >> clinton gave ground. obama has given no ground. i don't know there's any indication he'll give any ground this time. that's a big mistake if that's the case. i hope not. but it appears that's a real possibility. >> how times have changed. i thought mitt romney had a bit of a -- he could do a bit of a "saturday night live" skit, he had some good laughs there, but think about al gore, vice president to clinton, how often did he use president clinton when he was campaigning in 2000? >> times do change, you know. right now you go with the hot hand. president clinton obviously the hot hand. >> if president clinton is the hot hand for the current administration, boy, we haven't just lowered the bar on employment. back to you. when we come back, are loyalty cards the new coupons in the tech area? a few moments left in europe's trading day. [ horn honks ]

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a lot of data we've gotten here stateside, consumer confidence, home prices, overshadowing the fact that s&p did cut their forecast for eurozone gdp simon with the european close. >> we've had verbal intervention coming through from the two key players within the eurozone, both mario draghi and angela markle. i'll come to that. we had a huge concern about

where we were on earnings. you saw it in bmw, the telecom stocks. telecom australia in trouble because they were worried about delivering dividend down the line. we were down in negative territory, but verbal intervention has lifted it. >> european markets are closing now. >> so, this is where we close out. you can see green across the screen. those vorcices, the bundisbank was out there, talking to its lawyers about ecb bond buying further down the line might be illegal. mario draghi took it before the federation of german business. he suggested to them it was something they basically had to do. he had enormous respect for the bundis bank. previously standing at that same

stand you had angela merkel come through telling the rest of europe that now is the time to take a deep breath and that germany was not an island. she said, we are an export nation. 40% of our exports go to the eurozone. 60% go to the european union. we cannot disconnect from europe and global economic developments. very clearly telling germans after she met draghi there has to be further integration. what's the effect of this? if you were thinking of selling italian or spanish bonds short, you might think twice because it raises the prospect further there will be aggressive bond-buying further down the line. the stock market as you can see moved from negative territory into positive. germany, spain, italy. similarly those yields were well anchored on the ten-year in germany. just a quick note on are we are with earnings. i mentioned to you bmw. goldman put a note out earlier today in which it was suggesting having met with management it is concerned about deteriorating pricing environment for a lot of the luxury car operators.

bmw's case is very much about southern europe. they're concerned about a significant global slowdown, however, and they cut their target on bmw, daimler and other carmakers today. interesting enough, they raised it on peugeot. >> did you see aston martin is making a comeback? courtney reagan. >> good morning. simon covered the european headline. we haven't forgotten about them but it's on the back burner for now pip look up and see the dow is up by 43 points. just off session highs. we have a number of positive data points. the consumer confidence reading the best we've seen in seven months. some people a bit more positive about this job outlook and some of these other economic conditions. case-shiller home price index better than expected. as a result haof both of those numbers we are higher.

all of the major sectors are trening higher. health care leading the way, all-time highs right now. telecom 4 1/2 year highs. consumer discretionary stocks, high again on the consumer confidence reading. if we take a look at home builders we have turned around for the most part in this group, trending higher. that is, again, perhaps on the back of this s&p home price index. barclay's downgrading three names, lennar, toll brothers and horton. but moving out of the consumer names, look at barnes & noble, introducing a new nook service, due to come out in the fall. we're off session highs but still up in decent volume for this name. we're watching a lot of consumer names a bit more carefully as we go into the very important fourth quarter after this week. carnival shares hitting 52-week

highs. didn't have high expectation for this stock. growth going forward, some prospects on guidance weren't quite what the street hoped for but we're up by almost 3% on carnival. take a look at office suppliers. staples announcing strategic initiatives to turn around many parts of the business, or at least an effort to do so. investors aren't convinced. heavy buying and we're seeing some moves into shares of office depot. >> courtney reagan here at the nyc. thank you very much. gary is here on set talking about a great interview andrew brought us this morning with barry diller. >> fantastic interview. andrew did ask mr. diller about the ipo facebook, a subject -- i said i wasn't going to talk about anymore, but -- >> too late. everybody else is. >> let's take a listen barry diller's answer in terms of the distribution of the stock on the ipo. let's take a listen to that. >> i think that people who bought it at the ipo were either

speculating, in which case they deserve whatever they get, good or bad, but it's of no national importance. very few people, i suspect, were in that stock for long term. mostly it was traders. therefore, i don't have much sympathy for it. >> well, guess what? mr. diller's wrong. barry diller is clearly wrong. if you took a look, as you remember that day, you were out in california, i was at the nasdaq. we looked at some. allocations. we know the mutual funds and hedge funds that went in for a million share order and they got the million shares. no, it wasn't the retail, barry dirl, that went in as speculator. retail jumped in to ride coat tails. it was the mutual funds and the hedge funds. the long-term investors, many of them -- i'm not going to single out names, but those were the people that set the bar here. retail followed to suggest that retail set the bar completely irresponsible, in my opinion.

>> you're saying that the retail investor was a leming? >> they went to their brokers, the wealth adviser and said, i want to buy into this thing. they didn't set price limits. retail says, get me as many shares as you can get me, hoping to make money and flip it. the bar itself, the $38 price was set by the mutual funds, the professional investors, the one who market themselves, run commercials all day on cnbc talking about the long-term investors. who are the ones if you watch their tv commercials say, we're investing for three to five years. they set the bar for facebook. that was just bad information by diller. can we go back to the buyback stuff? we have some of the smartest viewers in the world. this great stuff tom lee put together, it does not break out the amount of stock bought back by companies for options that were exercised or compensation that was paid in the form of stock that then companies returned. however, however, the numbers are still net of all that, more money has been bought back in shares than have been sold by mutual funds in terms of

redemption. so the de-he cequitizing as he s it. there's going to be less shares outstanning because the buy backs are going to continue. management and boards of directors will tell you to buy back stock. the de-equatizing continues, net compensation since 1994 that's been paid in stock. >> did someone have a quibble about the methodology of -- >> not a quibble. we have the smartest viewers. they wanted to know if this was net of all the buybacks related to the additional comp paid in stock. and the answer is, this is the gross number. but even if you netted out, it's still more. >> that's good stuff. >> de-equatizing the he cequity markets. caterpillar slashed outlook, saying net year will parallel the stalled progress seen this

year. joining us on the cnbc news line, eli lustgarten comes from the expo. good to have you. >> thanks for having me. was this a surprise to you or not? >> not a total surprise. conditions in the construction equipment industry have been soft around the world. and the u.s. has had a big step up in purchases of equipment, though construction spending hasn't been going anywhere. at some point the pipeline gets filled and that's what's happened. >> what's driving the stock down is caterpillar lowered guidance for 2012. the stock looks terrific for 2015 but they lowered guidance for 2012 by saying they're going to take $2 billion out of the construction business in the fourth quarter. that will reduce earnings by something like 25 to 50 cents a share. it's the lowered guidance for 2012 combined with uncertainty for 2013 that really is weighting on the stock at this point. >> interesting. in light of this guidance, was

busyrus ill-timed? >> it was timed well and still a good long-term prach. everything affecting cat is equipment. the needs from the mining sector are huge for the next decade. it is a long-term purchase, which will give you long-term dividends, but you have to expect it to pay out in the long term, not immediately. >> i think some are probably worried about the likes of a barric or anybody else who is rethinking the big picture on cap-ex, right? is that not a big concern for you? >> we have the 2013 mining cap-ex would drop 5% to 10% and mining expenditures for equipment will stretch out. it doesn't change the long-term as long as we have global growth. so, as long as the global

economy cooperates, cat will be fine over the longer term. you can't have everything immediately. >> walk us through quickly, eli, your targets for the next year. is this the environment in which you want to be weighting into some of these cyclicals? >> you want to invest for 2015, you've got lots of bargains. but there's such heightened uncertainty for the economy midterm to 2013 that we're sort of neutral on most of these stocks. caterpillar, we're neutral. and we think there's some better opportunities, or have been, in companies like eaton and even deere because we think the farm sector improves. cat will have its day. we just have to get through this period of uncertainty and the worries that things could get tougher for next year. >> one of the deans of the industry, eli, thanks much. >> have a good day. >> eli lustgarten from longbow. let's get to brian shactman. breaking news. >> a recap for people.

monday night football, the last play of the game, seattle seahawks, controversial play, were winners when it was called a touchdown. vegas and betters, packers went from winners to losers as well and a whole lot of money involved in this play. according to pregame.com, there was $150 million more bet on the packers, which means $300 million basically switched sides. i have two sources in vegas, including jay, las vegas hotel & casino, he runs the book there, he said that number is more like over $1 billion. $12 to $15 billion was bet in vegas and you have to multiply that globally, and you can do the math, so this wasn't a $200, $300 million swing, it was up to as much as $1.5 billion. we have more on dotcom as well

as "power lunch". >> unbelievable numbers as that controversy continues. when we come back from some of the same minds that brought you groupon, now comes belly. it just had the biggest four days in its history as one of the youngest companies featured in apple's new operating system. we'll talk to the creator in our "squawk on the verge". tesla stock getting crushed despite new efforts including these new super-charging stations as the company still short-circuiting expectations. up.

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loyalty cards startal be at belly, apple partnered with as well as passbook. belly saw over 20,000 app downloads over the weekend which pushed the app to over 500,000 users. joining us first in our "squawk on the verge" segment, logan, joining us from chicago this morning. good morning to you. >> thanks for having me. >> i love this story. maybe it's because i'm from chicago but you start this thing a year ago at a comic store.

a year later you're the only startup that apple picks to join this thing. how does that happen? >> well, you know, with belly we create unique loyalty programs for small and medium sized businesses. with apple's launch of passbook they can add digital passes to a wallet. thankfully those passes work and be uniquely suited with belly to be able to add small and medium sized businesses to passbook to add these mobile digital wallet, digital passes, to a mobile wallet. >> right. you get 20,000 downloads over the weekend, right, some of the biggest days in your history? >> yeah. we've been inundated. it's up to around 40,000 so far with over 60,000 of our users that have already updated. we've got half of our locations that have had passes added to passbook so far. it's really been an exciting couple of days. >> i think people who are familiar with the model might

look first to foursquare, right, as an example. you check in, there's a reward, the mayor in their case. what's is it in your case? >> we work with each business, so each business puts an ipad in store we provide, we give all their customers to have one physical loyalty card or download our app and use it as their loyalty solution at their favorite places. >> and meanwhile, you drive some revenue by charging a subscription fee to the business, correct? >> yeah. we give -- we give the business all the tools they need to have a completely, unique solution so businesses pay us a monthly subscription service for belly. >> how challenging is it to get businesses to agree to the fee, right? i assume bring in some infrastructure that's going to coordinate with you guys. >> well, product engagement, so we provide the technology that's solving a problem for small

businesses. we're helping them level the playing field and providing them technology they haven't had access in the past. we're working with them to create better relationships with their customers, get more data and analytics and more communication tools so they can have a more ongoing relationship with their customers. once they see the product and they see the engagement we've been able to drive, that conversation goes pretty well. >> and then there's, of course, the rewards themselves. which are highly customized. the chicago 7-eleven, you can name a slurpee flavor for a month. at ben & jerry's, you can get a date with jerry. at ally cat comics, you can punch a staff member of your choice in your stomach. do these ideas come from you or the business? >> we work with each business to create a unique program. you know, these aren't rewards that aren't just for quirk sake. loyalty programs as small and medium sized businesses is about relationships. loyalty to a small business is not $2 off on your bank statement. so, what we try to do is create

rewards that are meaningful to the culture, the personality, to the business objectives of that individual store. so, this content isn't just quirk for quirk's sake. i mean, we're creating viral content and meaningful content that people of that individual location care about. >> meanwhile, you're working with the likes of groupon, raised money from andreeson. you mentioned the inundation from apple. how much can you handle at one time in terms of growth? >> we've had a great year. belly started, like you said, just a year ago. since then we've added 3,000 merchant locations, over 500,000 users checked into our businesses over 3 million times. we're cognizant of growing at an appropriate rate. we have, thankfully, attracted sop top-tier investors and advisers. they've gone through this before. so, we're very lucky to be able to attract that level of talent, to work with those advisers and help them guide us on our path to gloet.

>> must be an amazing thing to be a part of, logan. appreciate your time. we'll be watching you guys closely. >> thanks, carl. >> logan lehigh with belly in chicago. when we come back, tesla and its stock today, just like a battery, a couple of pluses but a whole lot of minuses. phil lebeau will walk us through that in a moment.

shares of tesla taking a hit after cutting its revenue forecast for the year. the news coming just hours after

the company unveiled a new network of super chargers for electric vehicles. our phil lebeau has more on that. elon musk's reputation taking a hit. >> there's a number of stories going on here. let's talk about the first one that impacts investors in tesla, the company coming out today and cutting its guidance in what it expects to bring in terms of revenue due to a slower s-model rollout. $120 million lower. tesla originally forecast delivering 5,000 model-s sedans this year. most are saying, they're not going to make that. officially the company has not changed its guidance. last night in los angeles the company unveiled its super charger network for recharging model-s car batteries. these tesla super-chargers will provide owners with a quick charge when they're on long trips. by the way, a prequick charge, the model-s tesla super-chargers are already operating in six

locations in california. they're expecting to expand rapidly across the country. >> within two years, we'll cover almost the entire united states with super-chargers. you'll be able to travel practically anywhere. >> the idea here is that they are answering the one problem that a lot of people have with electric cars, which you are range-bound. you can't go across the country if you want to. tesla says that will not be the case. take a look at shares, up 45%, carl, since the ipo a little over two years ago. i remember at the time, we were in times square and the stock had a nice pop off at the beginning. i remember talking to a number of people and they said, those people are fools. they're buying into this company and it's going to come crashing down. two years later it's up 45%. >> you're in times square a lot lately, phil, looking at new cars. when we come back, don't forget to tweet us, by the way. it's been one controversy after another with this football game between seattle and green bay last night. a controversial call with these

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welcome back to "squawk on the street." a quick market flash on safeway, swy, seeing the stock pop 3%, on headline loyalty program is gaining steam. saying in a survey of 700 customers, the grocer's new loyalty program called just for you, it's resonating and likely having a positive impact. in fact, they are upgrading the company to an outperform. also reiterating price target of 25 bucks. that's a level we haven't seen since 16 months ago. take a look at that chart, up 2.8% today. on the flipside, take a look at staples this morning, down almost 4%. the company, as we said earlier this morning, cutting its north american square footage by 15%. that is a large chunk. by the year 2015. also considering opportunities for european operations. some people have characterized this as a very large restructuring for a company facing very difficult long-term circumstances.

and michael kors pricing it is secondary, 23 million shares at $53. that's a slight discount to where the shares have already been trading about 54.13 this morning. michael kors, of course, the namesake of the company, the well-known fashion designer, stands to get about $210 million as part of this secondary. he'll be liquidating almost a third of his remaining stake. some have called this an exit day, a payday for some of the creators of the company. of course, going public at 20 in december. that has been one high-flyer. let's get to "squawk on the tweet." it's been one controversy with the nfl's replacement refs. last night between seattle and green bay only made things worse. the controversial call gave the win to the seahawks over the packers. brings us to this morning's "squawk on the tweet." if your portfolio was decided on by nfl refs they would have told to you buy blank and here's why. man, did we get a lot of great answers. mi